The Simpson-Bowles Rorschach test

It appears that no one actually knows what is in the Simpson-Bowles deficit reduction plan. It’s kind of like a political Rorschach test, you can see in it whatever you want to see…and what you see reveals your political leanings.

To take one example: Romney economic adviser and Harvard Economics Chair Greg Mankiw is upset that Obama isn’t being centrist enough on his tax policy. In the same blog where he expresses his displeasure at Obama’s desire to tax dividends like ordinary income he also condemns Obama for not endorsing Simpson-Bowles. The big problem here is that Simpson-Bowles also taxes dividends as ordinary income. As the economic adviser to the presidential nominee of a major party Mankiw really ought to know this.

Almost everyone on the right has condemned Obama’s request for 1.6 trillion in additional income…even though Simpson-Bowles contains 2.6 trillion in additional income.

President Obama has been roundly condemned for not pushing Simpson-Bowles. Perhaps, to his credit, this simply reflects that he actually knows what is in it.

Update: If you’re interested in learning about what is actually in the plan, the Center on Budget and Policy Priorities has a breakdown available here.

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